Driven Brands (DRVN +2.33%) stock, the holding company that runs such well-known automotive services brands as MAACO, Meineke Car Care, Take 5 Oil Change, and Auto Glass Now, tumbled 35% through 10:40 a.m. ET Wednesday morning after filing notice with the SEC that "there were material errors in our previously issued consolidated financial statements for the fiscal year ended December 28, 2024 ... and the fiscal year ended December 30, 2023."
Errors range from "the completeness and accuracy of recording leases" to the misclassification of "supply and other expenses" to "unreconciled differences for cash accounts" discovered in the process of (trying to) prepare its financial report for Q4 2025.
Image source: Getty Images.
What does that mean exactly?
In a nutshell, Driven Brands says its financial statements for the past two years "should not be relied upon," and it will have to redo its math and restate them. Driven was supposed to be reporting its financial results for Q4 2025 today, but now that's not going to happen.
The company plans to file a Form 12b-25 with the SEC later today, requesting a 15-day extension of the deadline for filing its Annual Report for fiscal 2025.
It may or may not meet this extended deadline.
NASDAQ: DRVN
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What does this mean for Driven Brands shareholders?
Driven Brands is a bit of a basket case right now. Although sales have held up well, Driven hasn't reported a profit in three years, and the stock is carrying quite a bit of debt -- about $2.6 billion net of cash on hand.
Analysts had been predicting 2025 would be the year Driven turned things around, and turned profitable again. Now it doesn't look like that's going to happen after all. The safest thing to do right now -- yes, even after the big drop -- is probably to sell.
